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Thread: Toxic mortgages

  1. #1
    ad hominem is awesome elipson's Avatar
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    Default Toxic mortgages

    How the hell do deal with these things?

    They are talking now about creating a government run "bad bank" to get this shit out of the market and start banks spending money again. On the one hand I see this getting banks to loan money again, but on the other hand it will mean the US govt spending money on this shit, and whats worse is that this shit wont actually clear the market and therefore they will still be overpriced. If the govt buy toxic shit for the cost of its mortgage, then the banks basically break even for dumb decisions and the paper value of these mortgages is still what the govt paid for them, even though the market hasn't found a bottom yet and therefore no one knows what they are worth.

    What if the govt bought them but for a reduced rate? 50% or 75% of whats left? The govt wouldn't be on the hook for such a useless bill and the banks wouldn't be able to turn a tidy profit on them.


    What about the idea of an insurance fund against this particular kind of failure, paid out by the banks? It works for term deposits, why not mortgages? Obviously this is a long term thing, but it would put the protective measures in the hands of the market and the banks themselves, so that they don't have to turn to the govt to cover their massive losses.
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  2. #2
    Mr. Hurty Pants Yiktin Voxbane's Avatar
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    How about .....

    Forcing the fucktards that made the loans to start with, to Poeple that never had a snowballs chance in hell of repaying them, to repay the money .

    Hell if the Govt. is prepared to bail out companies that made bad decisions , then why not individuals too . Surely that shit is unconstitutional or something .
    Thank GOD I'm an Atheist .


  3. #3
    Senior Member Robot Jesus's Avatar
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    remember a good number of these people where conned by morgae salesmen pretending to be bankers.

    the guys tring to make a fortune by flipping houses deserve to be reamed a new asshole mid lumbar.

  4. #4
    Registered Member HappyOldGuy's Avatar
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    Having the government buy up toxic mortgages was a mucho good idea 6 months ago.

    (a much better idea than just handing out cash)

    It doesn't seem like the financial markets are in danger of siezing up anymore. I wouldn't necessarily oppose help for mortgage holders, but it seems like almost everyone who was in a helpable state will be covered by the existing programs. Most of the people I know who are losing their houses now aren't losing them because they can't pay. Just that their home values are so far down that it doesn't make any sense for them to keep making payments.

    And thats beyond the ability of the government to do much about.
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  5. #5
    Equipoise
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    Quote Originally Posted by Robot Jesus
    remember a good number of these people where conned by morgae salesmen pretending to be bankers.

    the guys tring to make a fortune by flipping houses deserve to be reamed a new asshole mid lumbar.
    You're suggesting Real Estate Fraud versus people not reading the clause of ARM on their mortgage contracts. The individual mortgage issues is due to faults upon the companies for lending to bad credit risks for the purpose of making money as well as the individuals attempting to own things they can't afford.

  6. #6
    fuck you math class MEGA JESUS-SAMA's Avatar
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    If people had just stolen all that shit instead of buying it on credit we wouldn't be in this situation.

  7. #7
    Senior Member Robot Jesus's Avatar
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    Quote Originally Posted by Equipoise
    You're suggesting Real Estate Fraud versus people not reading the clause of ARM on their mortgage contracts. The individual mortgage issues is due to faults upon the companies for lending to bad credit risks for the purpose of making money as well as the individuals attempting to own things they can't afford.

    not fraud, but conned in the same way people who donate to peter popoff ministries are conned. finical institutions where able to alleviate much of the risk of subprime lending though securitization, turning the loan officer from someone charged with balancing risk and reward into a salesperson who could care less what the risks are. this is further compounded by the fact that those who would be utilizing the subprime mortgages are people with poor credit; people with poor credit are as a rule people who lack fiscal savvy.

    What you say is correct, only suddenly there was an industry in making your scenario play out
    Last edited by Robot Jesus; 29th January 09 at 11:48 PM.

  8. #8
    Science Fucker Photobucket WarPhalange's Avatar
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    I think this is in large the fault of the school system here in America. Math requirements are really low and as such, people have no idea how interest works and go wild with credit cards.

    Just a few weeks ago my mom and I were talking about credit cards and stuff and she says she has any sort of debt spread out between two cards and home a home equity loan (or whatever it's called). When she told me the percentages, they were something like 6%, 6%, and 4% for the home equity thing. I told her to dump ALL of that shit onto the home equity loan. She was scared to but I kept asking her to tell me what she was scared of. Was there some law or clause in the loan that I maybe just didn't know about? As far as I could tell, she just doesn't like putting all her eggs in one basket, even though this isn't a situation where that applies. 2% adds up. I'd rather have $20 than not have it.

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    Senior Member Robot Jesus's Avatar
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    in Alberta we have a partial credit course required for graduation called career and life management. it taught budgeting skills, resume composing, as well as a host of other things like credit management.

    I found it insipid and boring as I already knew all of that. my cousin failed it four times ;it just shows that some people simply have difficulty with these things.

  10. #10
    ad hominem is awesome elipson's Avatar
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    Your cousin probably didn't go. That's the only way people fail CAPP classes.
    "Pranksters and LARPists write or call in threats. Guys like me claim responsibility.

    -SFGoon.

    "I can teach libs to love guns faster then I can teach cons to think, it seems."

    -JohnnyCache

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